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To their credit, a number of high profile companies, including General Electric and Apple, have in the last several years moved overseas production back to the United States.

Unfortunately, this has led many pundits, consulting firms and policymakers to the false conclusion that the United States’ manufacturing woes are over and that America is now the most competitive manufacturing economy on the planet.

Exemplified by headlines such as “The Insourcing Boom” and “More U.S. Companies Are Reshoring,” the publicity for these cases has caught the popular imagination and increasingly influences public opinion and public policy. Even manufacturers themselves have bought into the myth, as 57% of U.S. manufacturing CEOs now believe that the United States is undergoing a manufacturing renaissance.

Despite some high profile cases of companies moving production back, the reality is that at the end of 2013 there were 15,000 fewer manufacturing establishments in the United States than in 2007.

Moreover, inflation-adjusted value added in U.S. manufacturing remains 3.2% below 2007 levels, although overall GDP is up 5.6%. And a closer look suggests that this decline is even worse. Real value added of non-durable goods is 11.5% below 2007 levels, and this includes the chemical and petroleum refining industries which supposedly are thriving because of the natural gas boom.

Overall, manufacturing without computers and electrical components (NAICS 334) is down 7.7% (this is a more accurate assessment because virtually all of the measured output gains in NAICS 334 are due to measurement issues resulting from Moore’s Law, computers getting faster, rather than from an increase in actual output).

Where are the Jobs?

These data suggest that the purported increase in the reshored jobs to offshored jobs ratio has not materialized. In fact, this is exactly what Harry Moser of the Reshoring Initiative, an organization that works with companies to analyze cost differences between producing at home and abroad, has found.

Moser estimates that at present around 30,000 to 40,000 manufacturing jobs are reshored while 30,000 to 50,000 jobs are offshored annually. Certainly this is an improvement from the 2000s, when the United States offshored as many as 150,000 jobs annually. But if gaining one job for every job we lose is a “renaissance” one would hate to see what stasis looks like.

Supporters of the renaissance narrative will argue that setting 2007 as the baseline is misleading because it includes the massive loss of manufacturing in the Great Recession. This is a fair point, but if it is not appropriate to include Great Recession losses, then it is not appropriate to include manufacturing gains that reflect cyclical recovery. And the reality suggests that much of the recent growth in manufacturing output and jobs has been cyclical, not structural.

To be sure, U.S. manufacturing has been growing since 2010, adding 520,000 jobs and expanding 2.4% in real value added growth. But almost all of this growth represents cyclical recovery from the lows of the Great Recession.

Industries that suffered large declines in demand during the recession have increased production as demand has recovered. This is most evident in durable goods, which typically have the largest cyclical swings. In fact, durable goods industries such as motor vehicles, other transportation equipment, and primary and fabricated metals have accounted for 72% of manufacturing job growth since 2010. By comparison, all non-durable goods together comprised just 3% of the job growth and had negative real value added growth of 6.8% from 2010 to 2013.

So why is the reality so much more disappointing than the hype? In large part it is because many renaissance proponents have misinterpreted or over exaggerated the potential positive changes in our competitive position.

For instance, many pundits cite increased global shipping costs with making producing in America more cost effective. In fact, global shipping costs, while elevated significantly in the late 2000s, have fallen dramatically and are back to normal. Likewise those who claim that a weak dollar will spur reshoring ignore that the value of the dollar is no lower than it was in mid-2000s when the U.S. lost a significant share of manufacturing to foreign competition, and has increased 13% in the last year.

Others write that labor cost differentials are narrowing with China. While this is true, the Chinese manufacturing laborer earns just 12% of U.S. wages and it appears that Chinese productivity is growing significantly faster than U.S. productivity.

Finally, many tout the miracle of shale gas. While lower energy costs certainly help, our energy costs are less than 5% of total costs in 90% of U.S. manufacturing industries (as measured by value added). In other words, for most manufacturing industries energy savings are modest. Moreover, one would imagine that low energy costs would at least lead to a turnaround in petroleum refining and chemicals. In fact, from 2010 to 2013 real value added in both industries actually fell by around 10%. Perhaps it will take a bit longer for lower energy prices to lead to a revival of chemicals and petroleum, but we have not seen it yet.

The bottom line is that putting our faith in current circumstances for a revival of U.S. manufacturing is a highly risky strategy. U.S. manufacturing will not fix itself, and believing that it will do so allows Washington to continue to ignore what it can do to help.

It could start by lowering the effective corporate tax rate, which for manufacturers is one of the highest among developed nations. This means both statutory rate reduction and expansion of key incentives like the R&D tax credit and accelerated depreciation. It can fully fund the Revitalize American Manufacturing Initiative. It can increase funding for research and development, including industrially-relevant R&D. And it can significantly ramp up efforts to roll back foreign innovation mercantilist actions designed to hurt U.S. manufacturers.

In essence, it is too soon for us to sit back on our laurels and presume all will be well. Other nations know this and are making the tough political changes needed, including cutting tax rates, expanding public investment and taking other steps. Their motivation has been and continues to be that they want to win the global innovation race.

If we in America believe that we are now winning without taking these steps, we are only deluding ourselves.